Mortgage applications had entered a period of instability in recent weeks after speculation the Federal Reserve central bank would raise interest rates.

However, the decision not to increase rates sparked a flurry of activity in the US market.

Data from the Mortgage Bankers Association (MBA) showed applications were 13.9% higher than the previous week with remortgage applications up 18%.

Purchase applications were 9% higher than a week ago and up 27% on the year.

“We saw significant rate volatility last week surrounding the FOMC [Federal Open Market Committee – the US equivalent of the Monetary Policy Committee] meeting, and rate declines toward the end of the week likely drove applications from both prospective home buyers and borrowers looking to refinance,” said Mike Fratantoni, MBA’s chief economist.

Mortgage interest rates remained flat compared to the previous week, for both remortgage and purchase deals.

“The increase in purchase activity was solely driven by applications for conventional purchase loans, which reached the highest level since June 2013. That time period was the so called “taper tantrum,” when mortgage rates picked up significantly following Fed communication to slow the pace of its asset purchases. Overall, the purchase market continues to show strength,” he added.